Apple’s India manufacturing takes another hit as supplier’s factory in India catches fire

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On February 27, Foxline, an Apple supplier, suffered a fire at its factory in Andhra Province, southern India, burning four production lines, and the other six production lines could not resume production for a short time. Inflicted another round of blows.

Apple’s India manufacturing takes another hit as supplier’s factory in India catches fire

It seems that Zhengwei Precision is just a fire accident of one company, but it exposes many problems made in India. Zhengwei Precision is one of Apple’s important suppliers, and it is also an important supplier that went to India to set up factories under the influence of Apple and Foxconn.

Another identity of Zhengwei Precision is that its boss and Foxconn boss Guo Taiming are two brothers. Both brothers are deeply tied to Apple and rely on Apple’s orders to make money. This is also an important factor for Zhengwei Precision to quickly go to the printing factory. Brother.

However, other suppliers who are not close to Foxconn have been reluctant to set up factories in India so far, because the environment in India is too complicated, Indians are not highly motivated to work and have a low level of education, resulting in low work efficiency; India’s economic environment is not clear, From Nokia, Ericsson to today’s Chinese mobile phone brands have encountered huge taxes and fees in the Indian market, and it is difficult to transfer out of India after making money. Nokia quickly closed its business in India because of this.

All these factors lead to enterprises in the industrial chain having doubts about going to India to set up factories, and Zhengwei Precision went to India to set up factories regardless of its close relationship with Foxconn and Apple, but now it has encountered a fire accident and suffered 1,200 damages. This will have a new impact on other industrial chain companies, and it will inevitably be a big blow to Apple’s push for Made in India.

Apple’s India manufacturing takes another hit as supplier’s factory in India catches fire

In order to promote manufacturing in India, Apple has gone to great lengths. Under the temptation of Apple, Foxconn, Wistron and other foundries have successively set up factories in India. However, after more than three years of development, it has been difficult for Foxconn to expand the scale of factories in India. , Foxconn set up a factory in Tamil Nadu in southern India as early as 2019. It took three years to expand the number of employees to 17,000. Now it is planning to spend another three years to increase the number of employees to 70,000. .

In contrast, Foxconn’s Zhengzhou factory in mainland China completed the construction of the factory in just two years and increased the number of employees to more than 300,000. Zhengzhou Foxconn also quickly became Apple’s largest foundry, producing half of the iPhone. This shows the efficiency of Chinese manufacturing.

Another problem facing Apple’s Indian manufacturing is the problem of the industrial chain. Wistron established factories in India earlier than Foxconn, and it has been 5 years. However, there are very few industrial chains in India so far. They are all imported from China, and long-distance transportation leads to rising costs. The low labor cost of manufacturing in India is quickly filled by transportation costs. Therefore, Apple began to push supply chain companies to set up factories in India.

Earlier it was reported that Apple directly submitted applications to India on behalf of 17 Chinese supply chain companies, and finally 14 companies’ applications were approved by India. The loss of nearly 100 million yuan will undoubtedly have a negative impact on Chinese supply chain companies. After all, few Chinese supply chain companies are as big as Zhengwei Precision.

Apple’s India manufacturing takes another hit as supplier’s factory in India catches fire

Today’s Apple itself also has troubles. The iPhone 14 launched in 2022 is not recognized by the market, resulting in a decline in iPhone shipments in Q4 of 2022. In order to promote iPhone sales, Apple has recently cut the price of the iPhone 14 Pro by 1,000 yuan for promotion, setting a new record for Apple’s new iPhone 14 Pro. The record of the shortest price reduction and the highest price reduction for the iPhone on the market, such as the promotion of manufacturing in India, has suffered another blow, which is even worse for Apple.

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